Republicans Never Grasped the Healthcare Challenge

The problem is the insurance system.

It was hard to get excited about the Republican plans for repealing and replacing Obamacare. And now that the effort has failed, it’s hard to feel especially sorrowful.

In typical fashion for the Republicans, there was never any solid message as to what exactly a repeal of Obamacare meant, or what should be done to replace it, if anything. The various bills offered up were a constantly-shifting myriad of suggested policies, most of them extremely milquetoast and wonkish. Not surprisingly, the public never managed to care about them.

Even casual observers could see that the so-called repeal was never anything more than some tinkering with policy meant to provide a political victory for Republicans while doing little to improve the lives of average Americans.

The Senate version, for example, only slightly trimmed Obamacare taxes while adding an onerous provision providing bailouts—paid for by taxpayers—to huge insurance companies. Rand Paul may have been right when he suggested the Senate plan was even worse than the Obamacare status quo.

The Senate leadership has now shifted to promoting a repeal-only plan, but the repeal-only proposals do little to actually address the problem of upward spiraling healthcare costs generated by government mandates and subsidies.

Obamacare was seen as a solution by many because it created new ways to subsidize healthcare, which would allow for the expansion of more government-subsidized medical services. Obamacare—in theory—paid for more subsidized healthcare by forcing young healthy people to buy insurance they didn’t want or need.

If the GOP managed to pass a repeal-only plan, costs would continue to increase rapidly, but the GOP would then be stuck with the blame for cutting subsidies and “reducing access” to healthcare. Thus, it’s not hard to see why many Republicans from swing states continue to be reluctant to support repeal.

The Pre-Obamacare World Is Nothing to Pine For

Thanks to more than 70 years of government meddling, the American healthcare system was already broken long before Obamacare came along. Decades of massive subsidy programs have accelerated price growth and favored certain monopolistic health care providers that cater to government programs. Governments have also limited supply of basic coverage by imposing an endlessly growing regime of regulations on the industry. Prior to the 1960s—before the introduction of Medicare and Medicaid—healthcare prices had been stable. They have since exploded.

The ways that the healthcare system is structured, regulated, and controlled by state intervention are so vast and varied as to be impossible to even describe in limited space. The very fact that we think of healthcare as a type of insurance is itself a government creation, as is the entire licensing and regulatory monolith that so severely limits services.

Because of this, returning to the status quo of eight years ago would hardly be a victory for freedom and free markets. Moreover, the United States has been one of the biggest spenders on healthcare in the world per capita. With the exception of Norway, Luxembourg, and the Netherlands, the United States tops every other nation in terms of the size of its healthcare welfare state. These trends pre-date Obamacare.

What the GOP Should be Doing

If GOP politicians really wanted to do something to improve access, reduce costs, and generally improve the lives of Americans, they’d quit with the grandiose repeal schemes. They’d simply focus on passing reforms that open up healthcare markets to competition, and allow consumers to circumvent the subsidized and regulated healthcare system.

It’s true that reducing subsidies—which themselves drive up prices by increasing demand—are still political suicide for many elected officials. But, the supply side of healthcare offers immediate opportunities for reform.

What can be done?

First of all, it is important to lessen the reliance on the insurance model of healthcare. The use of insurance as the primary means for distributing healthcare services is largely a post-World-War-II government invention, and thanks to government created tax and regulatory incentives, the insurance model has displaced ordinary market transactions in which consumers pay a fee for a service.

Many have been trained to recoil in horror at the thought of reducing the role of insurance, of course. Thanks to the power of the status quo, many now equate the idea of health insurance with healthcare itself. And yet, this is not true in any other industry—even those that are necessary for life’s basic necessities. There is no “food insurance” for example. Auto insurance exists, but is nothing like health insurance since it covers only rare accidental events.

Cash-for-service industries—whether groceries, or mobile phones, or dental case—continue to see increases in quality while prices remain far more stable than healthcare prices. Food budgets, for example, now take up less of our overall household spending than was true in the past. We certainly can’t say the same for healthcare.

To wean us off the insurance model, tax codes and regulations must be changed to stop giving preference to the use of insurance by employers. Tax-free health savings account must be expanded and tax credits for healthcare spending must spread. Flexibility for group coverage must be expanded beyond employer-based healthcare, and markets must be opened to more providers willing to be flexible and meet these needs.

Simultaneously, governments must get out of the way so service providers can compete and expand. We already know this will happen thanks to facilities like the Oklahoma Surgery Center which openly and competitively lists its prices for services.

Unfortunately, healthcare providers—and potential healthcare providers—are limited by government fiat in the number of facilities that can be built, the number of personnel that can be licensed, and the types of drugs that can be prescribed and imported. Americans will travel to other counties such as India to find lower-cost care from foreign doctors. But those same doctors are kept out of the United States by immigration and licensing laws. Healthcare facilities cannot be built in many places without special permission from state and local governments.

If one wanted to construct a system that kept healthcare prices high, this is a way to do it.

On the other hand, reducing costs, increasing flexibility, and moving beyond the insurance model should be the focus for healthcare reform going forward.

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80 Responses to Republicans Never Grasped the Healthcare Challenge

“Why not just pass a law that allows consumers to buy, and insurance companies to sell, whatever health insurance packet they want and can afford.”

OMG, this is exactly what every insurance company dreams about. The insurance companies are going to sell insurances similar to the ones fridge makers are selling. They are going to cover only those parts which do not brake.

Free market approaches when it comes to healthcare are flawed for two reasons:

1) The buyer is usually in a highly emotional state, if not panicking when buying. He/she will NOT make a rational decision as to what is the best product or the better price. Therefore, the laws of supply and demand do not work as they should.

2) While it is not apparent now health is not a discrete entity where whether or not I buy makes no difference to the neighbor (unless we are vying for the same good). The fact is that epidemics exist – and now we must prepare ourselves for new antibiotic resistant bacteria, and also tropical disease brought by travelers. So, if I do not seek medical treatement for what ails me, because I cannot affored it yet, you have no idea if what I got is a garden variety flu of the first stages of Ebola. And if you think that providing medical care to people you do not know is expensive, try to figure out how much it costs to contain a full blown epidemic.

(By the way, I did not hear anyone to complain about US taxpayers dollars going to treat Africans, in the middle of the Ebola outbreak. People were much busier panicking at the thought of Ebola getting here, and why wasn’t Obama more aggresive in getting rid of it?)

Our future promises us more Ebolas, more antibiotic resistant TBs, more HIVs. And we better have the health system that can handle it.

“A quick reminder for the McMackens of this world: to make a libertarian heaven work, Ayn Rand had to both introduce a perpetual motion machine, and have the world’s most brilliant men be thrilled to grow their own vegetables. ‘Nuff said.”

And a force field/invisibility barrier, and have the outside world actually collapse due to 0.1% leaving it

I often wonder where the near-white-supremacists on Dreher’s site must live, and I am flabbergasted by anyone who hasn’t noticed how many of our MD’s, including secondary and tertiary specialists, are Indian immigrants.

JonF: you’re absolutely right about the increasing cost of dental procedures and to make it worse, there is actually a surplus of dentists in the country. Or at least in Florida, and still the bills go up.

“There was the case of the mother who had a child with a rare heart disorder, for which an operation resulted in $230,000 in charges, but her insurance acquired through ACA meant she only paid $500. Everyone looks at the latter figure and says “this is why everyone needs health insurance.” Few want to look at the former figure and ask “why in the world are the charges for that operation $230,000?””

Here is the thing: American healthcare is indeed very expensive. And its plausible that in, say, Canada, same procedure would have cost, say, $100,000. Thing is that, from the point of view of an American family in the bottom 95% distribution, the difference is academic: 100K is going to ruin you, as will 230K.

““But those same doctors are kept out of the United States by immigration and licensing laws.”

The author needs to visit some of our city hospitals before making such a statement.”

But his statement is true, by any measure. If the United States, where doctors make about twice as much as European and ten times as Indian doctors, wanted to, it could have 100,000 foreign doctors reporting for duty next month. So, if you are a full spectrum libertarian, sure, doctor supply is constrained by law.

HHS released a very friendly estimate of the Cruz “consumer freedom” amendment today. It estimates that an average Cruz insurance deductible will have a 12K deductible, per person, and a 12K payout limit. In other words, this is insurance fraud, made legal.

One common denominator in cheaper, more efficient healthcare systems… is a government pricing monopsony. You also need to go after medical cartels as the author highlights, but at the end of the day, the main reason other countries with universal healthcare do so much better than the U.S. is because the U.S. government’s pricing monopsony doesn’t extend far enough. Hence we pay more for drugs, services, medical professionals, etc.

The second common denominator… is actually caring about the issue. The modern GOP does not care about the issue. Never has, never will. The U.S. is the only advanced country in the world where we’re still debating to what extent we demand people drop dead. Society feels a moral obligation to ensure no one suffers from lack of access to healthcare, but the party’s hostility to do what is necessary only aggravates the situation.

Obamacare—in theory—paid for more subsidized healthcare by forcing young healthy people to buy insurance they didn’t want or need.

That is a blatant lie. Nobody who had a valid claim to fiscal conservatism would subscribe to this grasshopper v. ant approach.

The reason younger people need to pay into health insurance is two-fold:

1) The same people moaning and groaning about buying health insurance they don’t need will be crying that its so unfair they should have to pay this huge medical bill if they happen to have a heart attack or a serious skiing accident. Well, there ain’t no such thing as a free lunch, so pay in while it doesn’t hurt so bad, and you’ll be covered without having to demand that everyone else pay for your carelessness.

2) Young people paying in now insures that THEIR OWN PREMIUMS will not have to loom so large when they themselves age. We’re all going to keep getting older for as long as we live.

There is something to that, but decades of relying on private health insurance, much although not all of it employer-provided, created this effect long before government did. In fact, government programs are notorious for slashing actual coverage well below “customary and usual” fees. Somehow, most medical providers still want the Medicare business.

A comprehensive, nonideological, approach to bleeding off the pressure on pricing would be a great idea. But it will take a good deal of dispassionate thought to come up with one.

To wean us off the insurance model, tax codes and regulations must be changed to stop giving preference to the use of insurance by employers. Tax-free health savings account must be expanded and tax credits for healthcare spending must spread.

Valid point. But the first distinction is to separate insurance against catastrophic costs from pre-paid medical. They are two different things. And we need to find a way to phase out reliance of medical care providers on inflated “customary and usual fees to bargain down from with insurance companies, leaving the hapless individual paying the artificially inflated prices. If we want to inspire competition, it wouldn’t be a bad idea to REQUIRE medical care institutions to post their prices.

In typical fashion for the Republicans, there was never any solid message as to what exactly a repeal of Obamacare meant, or what should be done to replace it, if anything.

Well, naturally. Republicans hadn’t a clue what to replace it with, they just didn’t like it because President Obama managed to get it passed. Actually, the more they try to replace it, the more people realize how much they like it.

“The idea that single payer couldn’t bring down our societal costs while maintaining the high quality America demands seems pretty defeatist, seeing how we’re in total (private and public dollars) already spending about twice as much per capita as most first world nations.”

but the overall per cap head is significantly smaller. There’s no way to stop the hysteria on this and i do think it is hysteria.

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Ok let’s remove the counter intuitive, such as emergency healthcare, or immediate catastrophic care. No kidding, in time of emergency, you go to the most immediate facility, which is what health insurance was initially provided for in the first place, catastrophic and emergency services. It was never intended to be applied to general practice. And even in the catastrophic (long term) one can certainly shop around. In fact, the process ought to so effective that they shop around for you.

Years ago when I was hit by a car, I didn’t get into the ambulance because I knew the rates would be well beyond my ability to pay. If i had died from my injuries, well, that’s the reality.

” There was the case of the mother who had a child with a rare heart disorder, for which an operation resulted in $230,000 in charges, but her insurance acquired through ACA meant she only paid $500.”

Catastrophic care. This is the game plan single out the most intense cases and then apply them to everyone. And it just makes no sense to paint a false picture by the least occurring scenarios and then say

“aha, see how bad it is.”

“So, unless you are for a society in which everyone says, “I am not my brother’s keeper” The solution is to make everyone buy health insurance which by spreading the risk among everyone will lower the cost of insurance and make it more affordable. In this scheme the young and healthy will subsidize the sick and elderly . . .”

I am unclear what alternative universe you live in that is the current system, the reality is that car insurance covers accidents, rare occurrences. it does not cover a flat tire, a change in spark plugs, in my case a couple of broken battery cables and bad terminals. By providing a general use proposition, you create one in which the demand is not covered by the pay in.
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“Does it mean that good drivers are subsidizing all these problems? Absolutely.”

No, it doesn’t it has very little to do with good driers, it’s the numbers in to the numbers out, regardless of driving record. When my car was broken into, more than once, it had nothing to do with my driving record. And as I suspect with most people they just replace the windows or whatever out of pocket. Insurance companies use DR as a means of encouraging safe driving, but they are focused reduced costs.

Take housing insurance, unlike earthquakes or even tornadoes, millions of people live along coast lines that routinely get flooded or are subject to routine hurricanes — that is the type of expense that could be voided as with a good deal of our healthcare. One of the largest expenses for major surgeries is the required testing that each specialist addressing the case requires.
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“To compare buying healthcare with buying groceries is something only a true believer would do. Because these are completely different. One doesn’t shop around for a Doctor when one falls sick, nor does one look around for the cheapest Dr. around before making a medical “buy.” Moreover the vast majority of items one buys to feed one’s family at the grocery store to provide supper for one’s family never bankrupts anyone.”

I guess it’s a god idea to re-examine the role of the general practitioner. The family doctor that addressed colds, flus, broken legs, and bumped knees. Most people are not bankrupt via health issues. Because they did take better care, in my view.

Compared o the current environment in 2010 there were about 14 million surgeries. It would be instructive to view the stats and the numbers are relatively small by percentage of people receiving catastrophic care.

Regulatory reform, intellectual property laws change has to come first. Prices have to drop to 1/3, 1/4 of what they at now, before we force my eighty years old mother to pay for her surgery up front and cash.

There’s no need to reinvent the wheel here. We know exactly how to ensure universal coverage and access: you create a nation-wide risk pool to cover everyone, and then allow for employers and other parts of the market to sell “add ons” to insurance or treatment that people might want.

The conservative fetish for buying insurance on the individual market seems to be from an aversion to buying insurance using the power of a large risk pool to disperse the risk, because large risk pools and cooperative action of consumers seems too socialistic for their taste, but that’s how insurance works.

Why not just pass a law that allows consumers to buy, and insurance companies to sell, whatever health insurance packet they want and can afford.

Because there’s no money to be made in insuring people who are sick or will be sick. And there’s definitely no money to be made in paying for someone’s treatment.

Progressive that I am, I find myself agreeing with George Will on healthcare. America’s original health care sin as he called it lies in not taxing employer provided plans as compensation, which it plainly is. There were valid reasons for implementing that at the time but it should have ended long ago. Revenues from that would be enough to cover some kind of basic plan for everyone. Political suicide for any party proposing it. So the solution would be to get both parties to agree, hold hands and jump off the cliff together. In today’s polarized environment that is less likely than pigs flying. Maybe someday.

“The second common denominator… is actually caring about the issue. The modern GOP does not care about the issue. Never has, never will. The U.S. is the only advanced country in the world where we’re still debating to what extent we demand people drop dead. Society feels a moral obligation to ensure no one suffers from lack of access to healthcare, but the party’s hostility to do what is necessary only aggravates the situation.”

Completely false Tim D. Everyone has health care if they need it. It’s part of a doctor’s hippocratic oath. The problem is with price, which government continues to make worse. Your statement that this moral obligation should cause you to believe that private individuals can solve this problem much more efficiently than government.

The comment section on this website reminds me of why I don’t frequent this page anymore.

Some are arguing that health care has an inelastic demand (meaning price doesn’t matter, people will still demand the service)so therefore the market won’t work. But that’s not really true for all medical services. It mostly applies only to true emergency services and life saving procedures. For instance why do we assume that if I tore my ACL (I’m 54) that I MUST have surgery? Truth is I could probably function pretty well even with a torn ACL (I’m not an athlete and work a desk job) and the surgery isn’t life saving or emergency. In other words, the market for ACL surgeries should be like that for Lasik – no reason it can’t be because the demand is more elastic.

Second, to echo other commenters, we need to stop conflating health CARE with health INSURANCE. There is absolutely no reason why health insurance can’t be market driven, but the current scheme is heavily regulated and doesn’t permit portability from state to state (how does the performance of an appendectomy or a routine check up differ in Seattle, Des Moines, or Charlotte?). Moreover, there is little in the way of options. I’m relatively healthy and really only need a plan to protect me from catastrophic losses, but my wife has some serious medical issues and needs more protection – why shouldn’t we be able to buy what we need on an open market and get different plans to suit our needs? There is nothing preventing this from happening except our laws, including specifically Obamacare, don’t permit this.

The problem with Obama-care style community rating (i.e. forcing people with high-risk and low-risk to pay the same price for “insurance”) is that in the end it is not insurance, it is a subsidy for those who are not traditionally insurable. And the subsidy is paid for in a very regressive way, with what is in essence a poll tax on insurance (at least for people who do not qualify for Obamacare subsidies).

Would it not make more sense to allow companies to charge different prices based on actuary tables, and then have some sort of subsidy for people with high insurance prices paid out of general tax revenues?

Put another way, if you are going to have a subsidy, would it not make more sense to have it funded through income taxes rather than through what is, in effect, a head tax?

For example, you make X number of dollars a year (let’s say $50,000 for your gross adjusted income). You pay your own insurance premiums to the first 12% of income (this equates to 1% of annual income per month, i.e. you pay up to $6000 a year or $500 a month). After that, you get an increasing subsidy – 50% for $500-$1000, 80% for $1000-$1500, 90% for $1500-$2000, 99% for $2000-$2500, 99.9% above $2500). So if you are in a very high-risk group and your insurance would be $5000 a month, you would actually pay $907.50 a month and the government would subsidize the other $4092.50.

Someone making $100,000 a year with the same risk factors would pay $1810 a month for the same policy and get a subsidy of $3190.

The exact numbers would likely be different, but you get the principle.

The point is, instead of healthy people subsidizing sick people, you would have whoever pays the most in taxes subsidizing sick people.

Moreover, there will still be competition for price because some of the benefit for getting a cheaper plan will go to the consumer, particularly for the richer consumers with smaller subsidies (the 90, 99, 99.9% subsidies might also be lower once you get to, say, $100,000 incomes and above). Of course, there might need to be some cap to prevent insurance companies from trying to sell heavily subsidized $1 million a month policies, but the cap would be fairly high.

“Would it not make more sense to allow companies to charge different prices based on actuary tables, and then have some sort of subsidy for people with high insurance prices paid out of general tax revenues?

Put another way, if you are going to have a subsidy, would it not make more sense to have it funded through income taxes rather than through what is, in effect, a head tax?”

In theory, that indeed makes sense. But think this through for a moment.
1. This creates an ever-intensifying price spiral (if the government covers subsidizes sick people, then what is the incentive to not hike prices for them to the high heavens)?
2. This transforms the insurance company business model: from now on, the key to making profits is to take premium money from people who are healthy, and figure out way to push them to governmentcare whenever they start filing claims. In other words, insurance companies become parasites who provide nothing of value.
3. Adverse selection: pretty much everyone has incentive to buy the skimpiest possible plan (or no plan at all), until they get sick.
4. And if you counter that by waiting periods, you will have people who bought a skimpy $12,000 deductible, $50,000 total plan without hospitalization or Rx and got cancer, who have to wait 6-12 months before they get treated. How politically viable that is?

So, in the end, you’ve created a plan that hideously expensive to tax-payers, gives enormous amounts of money to insurers for no reason, provides bad incentives, and screws up people who got suddenly ill. So, what’s the point, besides being able to say “free market solution!”

Oh, I might have misread you: you are thinking not of a Cruz-style two markets, but of a system with a single market, but different subsidy levels. That’s definitely workable, but at this point, the government is already paying 80% of healthcare costs, or whatever? Why not just let it negotiate the prices too, and thus basically move to a hybrid French-style system?

The notion that health care demand is elastic (reponsive to price) is simply ridiculous.

The demand is fixed. People are well or sick quite without regard for the price of insurance. And the will to live rather than die is inelastic to say the least.

The most obvious conclusion is that for most, no price is too high for insurance / health care. It’s a life or death situation. Health Care companies have products which will have full demand at any price and they know it and that’s just the reason why they get away with charging extortionate rates. And as you point out, when Uncle Sam shows up, the price magically goes up, because if it’s your life on the line, no price is too high.

The high price of health care in America is a classic case of market failure that has led to suffering and ruin for many, and is bleeding the government dry as it tries to backfill against the market failure. A failure rooted in free markets won’t be corrected by adding in some additional “free market magic competition sauce”.

As if insurance and drug companies even WANT to compete. That must be why they keep merging and buying out the competition, to gain market control and pricing power – but there’s a story for another day.

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But I do agree with one point the author makes:

The American system of employer-provided health care and retirement is absolutely awful from any reference point, liberal or libertarian. It’s awful for employers and it’s awful for employees. The sooner it goes away, the sooner a more rational system can be contemplated.

In theory, that indeed makes sense. But think this through for a moment.
1. This creates an ever-intensifying price spiral (if the government covers subsidizes sick people, then what is the incentive to not hike prices for them to the high heavens)?
2. This transforms the insurance company business model: from now on, the key to making profits is to take premium money from people who are healthy, and figure out way to push them to government care whenever they start filing claims. In other words, insurance companies become parasites who provide nothing of value.
3. Adverse selection: pretty much everyone has incentive to buy the skimpiest possible plan (or no plan at all), until they get sick.

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There’s nothing theoretical about that situation, it is a description of the Insurance system pre-Obamacare. Insurance companies (and employers) simply dumping the costly humans onto Uncle
Sam for him to pay for or let die.

I’m not a fan of Obamacare. But it took our incredibly suck health care system and made it a little less sucky. It’s not much, but I’ll take it for now.

If the GOP did manage to repeal it, the silver lining is that the next time around we’ll probably get something that actually works and costs less. Honestly, look at any other developed country and copy it, they’ve all got better systems with full coverage, better health outcomes and at lower less cost.

This creates an ever-intensifying price spiral (if the government covers subsidizes sick people, then what is the incentive to not hike prices for them to the high heavens)?

The subsidy is never 100%, and the wealthier customers will have every incentive to go for cheaper plans (if they are just as good) to save money.

Why not just let it negotiate the prices too, and thus basically move to a hybrid French-style system?

The major flaw with monopsony pricing is that if the service is underpriced, the providers have no recourse and will simply stop offering the service. With multiple players, one player can always decide it will be the one to pay a bit more, and eventually a price that works will be worked out.

Oh, I might have misread you: you are thinking not of a Cruz-style two markets, but of a system with a single market, but different subsidy levels.

In keeping with the theme of TAC’s highlighting of the problems of crony capitalism, that’s considered a feature for many Republicans.

Basically, Obamacare and all the Republican plans are all about scrambling to figure out a way to ensure that investors in insurance companies are able to stay afloat, even though there is no money to be made by paying money to treat sick people. Obamacare simply makes it a little more obvious to the public that insurance isn’t economically viable for customers or the insurance company if everyone is intended to be covered and treated.

Most of the rest of the world has already figured out this simple fact.

The initial shock of Obamacare came from the public being confronted with the reality that they are paying for “someone else’s health care.” They didn’t really realize that is what was going on every month, that their monthly premiums were going to treat someone else’s brain cancer or manage someone else’s diabetes or treat someone else’s depression. Obamacare confronted the public that this is what they are paying for. Now that the initial shock has died down, people are more comfortable with the idea, and it is becoming accepted that this is just how it works.

And right there is the Big Lie. The plain and simple fact is that before these programs existed a great many poor and elderly people were left to die. Maybe not literally “thrown in the street”, but very definitely allowed to die from diseases and conditions that were entirely treatable for those who could afford it.

Glaivester:Whatever the free market system would do with Charlie Gard, it can’t be worse than what the single-payer NHS is doing

No, it would simply guarantee that there would be 100 Charlie Gards a day, every single day. It would take a situation that is sufficiently rare and unusual that it made international headlines, and turn it into such an ordinary everyday occurrence that it wouldn’t even rate a mention on page 10 of the local paper.

What the NIH did with Charlie Gard was treat him to the limit of what was available. The one item of contention was an experimental treatment that offered some glimmer of hope. Doctors, by their professional opinion believed it would not work, and would just inflict more hardship on the child and its parents. The parents are desperate, and desperate people are not known to make wise decisions.

It is a fact that those to whom the doctor tells that there is nothing more to be done to grasp at straws. Do you remember Laetrile? Many people sought cures from it, and blasted the medical establishment for not embracing it.

There is a maxim that extreme cases make bad law. To pass judgement on a health system based on this extreme case is bad argumentation.

When I entered the group health insurance field years ago, part of our education was a presentation by one of the private insurance company’s actuaries, that help set rates. Our following class was canceled and he needed to fill some time to hold us. He said to the effect: ‘I probably shouldn’t say this as we are a private company, but the best and most predictable situation would be to cover the whole country from birth. This would give us the large number of people on which to base our costing and by covering everyone from birth you would do away with pre-existing conditions. If periodic exams were required this would catch many problems before they became real expensive and maybe unfixable. I later worked for the largest insurance brokerage company in the world when Medicare was being debated. A senior VP told us it was held up but would pass after removing Social Security Admin from administering claims (single payer) which would cost about 5% and mandating the leading private insurance companies administer the plan, which might cost up to 20%, at which point they would advise their congressmen and senators to vote for the bill. SS Admin was much more cost effective but the private companies did not want to lose the business. The whole concept of insurance (promoted by Founder Benjamin Franklin) is the sharing of cost so they don’t bankrupt individuals. It is spreading of risk. At Franklin’s time it was prominent in shipping/ship ownership. The complaint the “Obama Care” had “death panels” vs. private was a joke. All policies, private ones, had “Death Panels”, that is limits on certain exotic types of care and dollar limits. This is done to control costs.